Assignment #3 Grading Rubric Name: Highly Competent Competent Minimally Competent Not Competent Organization (8 points) Careful organization that enhances presentation; definite/appropriate intro and closure segments Logical organization; somewhat effective intro and closure segments Some organization; lapses in focus and/or coherence; attempt at introduction and closure segments Random and/or weak organization; no attempt at intro and closure segments References/APA Format (8 points) At least 8 credible references which are cited using APA format in text and on the reference page 6 or 7 credible references; minor APA errors in text and/or on the reference page Less than 5 credible references; some APA format errors in text and/or on the reference page Lack of reference or reference page, numerous APA format errors in text and/or on the reference page Mechanics (8 points) Virtually no errors in mechanics (spelling, grammar and/or sentence structure) Few errors in mechanics relative to length and complexity; fewer than 6 pages in length Some errors in mechanics but not enough to interfere with communication; fewer than 5 pages in length Errors in mechanics that affect communication Arguments (16 points) At least 3 well-formed arguments representing stance on debate Fewer than 3 well-formed arguments, but stance on debate is evident Arguments lacked focus or organization; some question as to stance on debate Very little development in arguments and/or stance not evident Total /40 points Comments ACC 150 THE LEGAL ENVIRONMENT OF BUSINESS With Doreen Smith, Esquire Chapter 32 * CONSUMER PROTECTION LAWSConsumerAny buyer afforded special protections by statute or regulationWho Can Be Liable?Persons or enterprises that regularly enter into the type of transaction that the injured consumer was involved. * GENERAL PRINCIPLES Who can sue under consumer protection laws? Lawsuits by the governmentLawsuits by consumers. What Types of Damages are Available?Replacement or Refund. Invalidation of Consumer’s Contract. Compensatory damages, punitive damages. * AREAS OF CONSUMER PROTECTION Advertising (Deceptive Ads)Federal Trade Commission (FTC)Corrective Advertising: may be required Labeling. Labeling that exaggerates or misleads a consumer is not allowed. * AREAS OF CONSUMER PROTECTION Selling Methods.Home-Solicited Sales: over $25 may be set aside within 3 business days (rescission)Telemarketing Fraud. National Do Not Call registryAllows consumers to opt out of telemarketing phone calls. * AREAS OF CONSUMER PROTECTIONThe Consumer Contract. Form of Contract (ex. font size cannot be too small) Two-Sided Contract (need notice that info. is on other side of page). Disclosures requirements for many transactions. * UNCONSCIONABLE CONTRACTS Uniform Commercial Code (UCC) The UCC provides laws for certain contracts Unconscionability Protection of consumer when a contract term is oppressive to th.

1. Assignment #3 Grading Rubric Name:
Highly Competent
Competent
Minimally Competent
Not Competent
Organization (8 points)
Careful organization that enhances presentation;
definite/appropriate intro and closure segments
Logical organization; somewhat effective intro and closure
segments
Some organization; lapses in focus and/or coherence; attempt at
introduction and closure segments
Random and/or weak organization; no attempt at intro and
closure segments
References/APA Format
(8 points)
At least 8 credible references which are cited using APA format
in text and on the reference page
6 or 7 credible references; minor APA errors in text and/or on
the reference page
Less than 5 credible references; some APA format errors in text
and/or on the reference page
Lack of reference or reference page, numerous APA format
errors in text and/or on the reference page
Mechanics (8 points)
Virtually no errors in mechanics (spelling, grammar and/or
sentence structure)
Few errors in mechanics relative to length and complexity;
fewer than 6 pages in length
Some errors in mechanics but not enough to interfere with
communication; fewer than 5 pages in length

2. Errors in mechanics that affect communication
Arguments (16 points)
At least 3 well-formed arguments representing stance on debate
Fewer than 3 well-formed arguments, but stance on debate is
evident
Arguments lacked focus or organization; some question as to
stance on debate
Very little development in arguments and/or stance not evident
Total /40 points
Comments
ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS
With Doreen Smith, Esquire
Chapter 32
*
CONSUMER PROTECTION LAWSConsumerAny buyer
afforded special protections by statute or regulationWho Can Be

3. Liable?Persons or enterprises that regularly enter into the type
of transaction that the injured consumer was involved.
*
GENERAL PRINCIPLES
Who can sue under consumer protection laws? Lawsuits by the
governmentLawsuits by consumers.
What Types of Damages are Available?Replacement or Refund.
Invalidation of Consumer’s Contract.
Compensatory damages, punitive damages.
*
AREAS OF CONSUMER PROTECTION
Advertising (Deceptive Ads)Federal Trade Commission
(FTC)Corrective Advertising: may be required
Labeling.
Labeling that exaggerates or misleads a consumer is not
allowed.
*
AREAS OF CONSUMER PROTECTION

4. Selling Methods.Home-Solicited Sales: over $25 may be set
aside within 3 business days (rescission)Telemarketing Fraud.
National Do Not Call registryAllows consumers to opt out of
telemarketing phone calls.
*
AREAS OF CONSUMER PROTECTIONThe Consumer
Contract.
Form of Contract (ex. font size cannot be too small)
Two-Sided Contract (need notice that info. is on other side of
page).
Disclosures requirements for many transactions.
*
UNCONSCIONABLE CONTRACTS
Uniform Commercial Code (UCC)
The UCC provides laws for certain contracts
Unconscionability
Protection of consumer when a contract term is oppressive to
the consumer (makes contract void).Contracts that are grossly
unfair to one party because of the superior bargaining power of
the other party.Example:During a hurricane, businesses inflate
the cost of bottled water because it is scarce. Consumer
protection laws would prevent this type of price gouging.

5. AREAS OF CONSUMER PROTECTION
Credit, Collection, and Billing.
Equal Credit Opportunity Act:
Prevents discrimination in extending credit
Fair Credit Billing Act
Allows consumers to correct mistakes on bills.
*
CREDIT CARDSFederal regulations prevents giving out
unsolicited distribution of credit cards.CARD (law relating to
credit cards)Restricts the solicitation of credit cards for those
under 21.Regulates late payment feesLimits fees on balance
transfersRegulates the payment of credit card bills
FAIR DEBT COLLECTION ACTFederal law that prohibits
improper methods of collecting debt.Can’t send a notice of debt
to a debtor’s place of employment that reveals the debt.It is no
defense to a creditor that the improper conduct was by a third
party collection agency.
FAIR CREDIT REPORTING ACTProtects consumers from
abuses that may arise when information is recorded and
revealed.Credit reporting agencies cannot reveal private
information to those who do not have a legitimate need for that
information.

6. PENNSYLVANIA LAWPennsylvania Unfair Trade Practices
and Consumer Protection LawLists 21 different acts that violate
the law.Actions can be brought by the Attorney General,
District Attorney or a private citizen.A private citizen can
receive actual damages and the court can award 3 times
damages and attorneys fees.
ACC 150
The Legal Environment of Business
With Doreen Smith, Esquire
Chapter 24
Theories of Liability
Warranty
A warranty is a promise (express or implied) about the nature,
quality or performance of goods
Covered under the Uniform Commercial Code
Contract law that governs the sale of goods-this is state
statutory law.
Strict Liability
Protection of buyers that allow them to recover for injury and
economic loss related to the purchase of a product.
Products liability
A general terms used for several different theories of liability
related to injury and economic loss arising from a defective
product.
Who are the parties?
Who can recover?

7. Anyone who is a buyer, employee of buyer, third party or
bystander (it is not limited to those with a contractual
relationship).
Who can sue?
Injured party can sue the seller, manufacturer or distributor.
Warranties
Warranties may be express or implied
An express warranty is a statement by the seller of goods that
becomes a basis of the bargain. It can be oral (verbal) or
written.
An implied warranty is not made by the seller but is implied
under the law.
4
Express Warranties
Under the UCC, a seller is liable for any express warranty that
is a statement of fact that becomes the basis of the bargain.
There is no need for the statement to include the word warranty
Seller’s Opinion
A seller is not liable for the statement of an opinion.
5
Implied Warranties

8. A seller makes a warranty of title (that the seller actually owns
the item) unless such warranty is excluded.
Warranty of fitness for a particular purpose is enforceable if the
seller knew of the buyer’s intended use.
Two requirements:
Buyer intends to use a good for a particular or unusual purpose
and
Buyer relies on the seller’s skill or judgment.
6
Implied Warranties
Implied Warranty of Merchantability
A merchant warrants that the goods are fit for their normal use
(warranty of merchantability).
Seller must be a merchant (seller who deals in specific goods)
If the merchant does not specifically exclude or modify the
implied warranty of merchantability, then it is included in every
sale by a merchant
This warranty applies to the sale of foods in a grocery store and
restaurant.
Foreign-natural test--If a item is found in food that causes
harm, the court considers whether the item is natural. Such as a
cherry pit in a cherry pie would be natural
Reasonably expected test- Court considers whether the buyer
reasonably expected defect.
7
Tort Law
A seller of a defective product can be liable under negligence
law.
If an injured person can show that the defendant was negligent
in the manufacture or design of a product, he or she may prevail

9. in an action.
Negligence also includes the failure to provide adequate
instructions for use or safety warnings.
8
Tort Law
Strict liability in tort
Liability exists without regard to fault (no need to prove
negligence)
A manufacturer, distributor or seller of a defective product is
liable to anyone injured by the product – buyer, user, innocent
bystander.
The plaintiff must show there was a defect in the product at the
time it left the control of the defendant.
The defect in a good can be for its design, manufacture or
instructions.
Contributory negligence is not a defense, but assumption of risk
can be used as a defense.
9
ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS
With Doreen Smith, Esquire
Chapter 20

10. PERSONAL PROPERTYPersonal Property Personal property is
tangible and movable and includes rights in intangible items
such as intellectual property.Real property is non-movable, such
as land and anything permanently attached to it (fixtures).
Property rights include the right to possess, use, enjoy or
dispose of the property.
PERSONAL PROPERTY
Gifts.
Inter Vivos Gifts: An ordinary gift between two living persons .
Intent andDelivery. Delivery can be actual or constructive.
CONDITIONAL GIFTA conditional giftThis is when a gift is
made subject to a condition.Example—I will give you my
diamond earrings when you graduate from college.Engagement
ringsAn engagement ring is typically considered a conditional
gift subject to the condition of marrying the other person.
PERSONAL PROPERTY
Finding of Lost Property.
Personal property is lost when owner does not know the location
but intends to retain title.
The finder does not acquire title but possession. Absent a
contract or statute, finder is not entitled to reward.
PERSONAL PROPERTY
All rights in a property can be held by one individual, called

11. being held in severalty.
Ownership rights may be held concurrently by two or more
individuals, in which case it is said to be held in co-tenancy.
The major forms of co-tenancy are:
Tenancy in common.
Joint tenancy.
Tenancy by entirety.
PERSONAL PROPERTYMultiple Ownership of Personal
Property.
Tenancy in Common. Ownership by two or more persons;
interest may be transferred or inherited (or bequeathed).
Joint Tenancy. Ownership by two or more persons; has right of
survivorship, so when one joint tenant dies, the other(s) take the
ownership share of the deceased.
TENANCY IN COMMON
Example:
Car Owned by Jim and Bob Bob Dies Jim gets ½ of
antique & other ½
of antique car goes to Bob’s heirs
Tenancy in Common
JOINT TENANCY
Example:
Owned by Jim and Bob Bob Dies Jim now owns

12. antique car
By Joint Tenancy with alone—
severalty
right to survivorship (individual
ownership)
PERSONAL PROPERTYMultiple Ownership of Personal
Property
Tenancy by Entirety. Ownership by both a husband and wife;
like joint tenancy but only between spouses. In many states,
divorce converts a tenancy by entirety into a tenancy in
common.
BAILMENTS
Definition.
Tangible personal property is delivered by the owner (bailor) to
another person (the bailee) under an agreement that the identical
property will be returned or delivered in accordance with the
agreement.
Elements of a BailmentAgreement: express or implied.Delivery
and Acceptance. Bailor’s knowledge required for
responsibility.
BAILMENTS
Classification of Ordinary Bailments. In some states, the
standard of care required of a bailee is related to the class of
bailment:
sole benefit of the bailor: the bailee is required to exercise only
slight care and is liable for gross negligence only.
sole benefit of the bailee: the bailee is required to exercise great

13. care and is liable for the slightest negligence, and
for mutual benefit, as in a commercial bailment the bailee must
only exercise reasonable care, and is liable for ordinary
negligence.
BAILMENTS
Liability for Defects in Bailed Property.Bailor has duty to
inform of defects in bailed property, but also make reasonable
investigation for defects.
Contract Modification of Liability. Bailee may limit liability
(except for willful misconduct) by contract. Example--Dry
cleaning businessWhen a customer drops off clothes to be dry
cleaned, the business is entering into a bailment. The business
will take possession but not ownership of property. Business
can limit liability by entering into an agreement with the
customer.
ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS
With Doreen Smith, Esquire
Chapter 11
*

14. DEFINITION OF CONTRACTA Contract is a legally binding
agreement between two or more parties.Elements (all elements
are necessary to make a binding contract)An agreement (offer
and acceptance)Between competent partiesBased on genuine
assent of the partiesSupported by considerationMade for a
lawful objective andIn the form required by law
AGREEMENT
(OFFER AND ACCEPTANCE)OfferThe expression of a party’s
willingness to enter into a contractual
agreementAcceptanceUnqualified assent to an offer to make a
contract.Importance“Offer” and “acceptance” are 2 of the 6
elements of a contract. If either the “offer” or “acceptance” are
not present, a binding contract cannot be formed.Intent --parties
must intend to form a contractCounterofferWhen an offer is
made and the offeree (person to whom an offer is made)
changes the terms of the offer (basically rejecting the original
offer)
COMPETENT PARTIESAn agreement that otherwise appears to
be a contract may not be binding because one of the parties
lacks contractual capacity. In such a case, the contract is
ordinarily voidable at the election of that party who lacks
contractual capacity.
COMPETENT PARTIESContractual incapacity is the inability,
for mental or physical reasons, to understand that a contract is
being made and to understand its general terms and nature.

15. Incapacity may be due to:Being a minor.Insanity.Intoxication.
GENUINE ASSENT OF THE PARTIESSometimes an agreement
may not be voluntary because one of the parties was under
undue influence or duress.Undue InfluenceWhen one party
dominates another person in a contractual situation.DuressA
person may be under physical or economic duress and forced
into a contract.
CONSIDERATIONConsiderationIt is the bargained-for
exchange between the parties to a contract. Without
consideration, there is no contract.Example:Susan offers John
$100.00 for his Ipod. John accepts. So, Susan gives up $100.00
and John gives up his Ipod. Another way of looking at is, Susan
gains an Ipod and John gains $100.00.
LAWFUL OBJECTIVEIf a contract is Illegal, the contract is
void.A void contract cannot be enforced by either party. The
parties are not entitled to the aid of the courts. This is different
than a voidable contract where one of the parties can at their
option disaffirm (avoid the contract).
FORM REQUIRED BY LAWStatute is a law created by the
legislature.Statute of frauds states that to prevent fraud, certain
kinds of transactions must be evidenced in writing in order to be
binding or enforceable.The statute of fraud is governed by state
law.Verbal and implied contracts are still enforceable as long as
the subject matter of the contract is not covered by the statute

16. of frauds
CONTRACTS THAT MUST BE IN WRITINGAgreements
which cannot be performed within one year
Agreement to sell land (real estate)
Promise to pay the debt of another.
Promise by an executor/administrator to pay a claim against the
Estate from personal funds
Promises made in consideration of marriage
The sale of goods priced at $500.00 or more.
BILATERAL VS. UNILATERAL CONTRACTBilateral
contractAgreement where one promise is given in exchange for
another.Most contracts are bilateral Unilateral contractContract
in which one person makes a promise in exchange for an act.
That is, the only way to accept a unilateral contract is with
action.ExampleJim lost his dog. Jim posts announces to the
community that if anyone finds and returns his dog he will pay
that person $100.00. The only way to accept Jim’s promise is
to find his dog and return it.
CLASSES OF CONTRACTS
OR
OR
binding and effective
VALID
VOID
without legal

17. effect (unlawful contracts)
VOIDABLE
allows cancellation at option of one party (such as those without
capacity)
CLASSES OF CONTRACTS
OR
OR
EXECUTED
completely performed
BILATERAL
one promise
given in exchange
for another
OPTION CONTRACTSOption ContractThis is a contract that
gives one party the right to enter into a second contract at a
later time.Example:Jim wants to purchase Microsoft stock
owned by Bud at $30.00 a share. So, Bud agrees to give Jim the
option to purchase 100 shares of stock at that price any time
prior to October 31st in exchange for a payment of $50.00. If
Microsoft stock goes up over $30.00 a share, then Jim will
exercise this option; if not, he will not exercise this option.

18. RIGHT OF FIRST REFUSALThis is a contract in which one
party has a right to meet the terms of a proposed contact before
it is executed.Example:Sally wants to buy the home next door to
her house (owned by Bob), but Bob doesn’t want to sell. Sally
and Bob enter into an agreement. Sally pays Bob $1,000 in
exchange for Bob’s promise that if Bob ever puts his house up
for sale, Sally would have the right to purchase the home for the
same terms and conditions that Bob is offered by a willing
buyer.
QUASI CONTRACTSIn certain situations, the law regards it as
unjust for a person to receive a benefit and not pay for it. In
such a case, the law of quasi contracts allows the performing
person to recover the reasonable value of the benefit conferred
on the benefited person even though no contract between them
requires any payment.
ELEMENTS OF A QUASI CONTRACT
A benefit is conferred on the defendant
The defendant’s knowledge of the benefit
A finding that it would be unjust for the defendant to retain the
benefit without payment
ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS

19. With Doreen Smith, Esquire
Chapter 19
*
BREACH OF CONTRACTBreachFailure to act or perform in
the
manner called for by the contract. “Anticipatory
Breach”When a party makes it clear that he or she does not
intend to fulfill the contract. Example:When your house painter
calls you and tells you he will not be able to paint your house
even though he has entered into a written contract to do so.
WAIVER OF BREACHThe effect of a breach is nullified if the
aggrieved (injured) person by word or conduct waives the right
to object to the breach. WaiverWhen the injured party,
relinquishes a known right or objection.Example:Your house
painter tells you they cannot paint your house. You tell the
house painter that it is no problem, you can paint the house
yourself.An aggrieved party may accept a defective performance
without waiving a claim for breach if the party reserves their
right to sue.
REMEDIESWhat is a remedy?Action or procedure that is
followed in order to obtain damages for an injury When there is
an anticipatory repudiation the injured party has three choices:
Do nothing and require performance as outlined in the contract;
Regard the contract as breached-bring a lawsuit for damages

20. Regard the repudiation as an offer to cancel the contract.
MEASURE OF DAMAGESRule for Breach of Contract
CasesAward the injured party the amount of money that would
place them in the same position as if the contract had been
performed (referred to as Compensatory damages).Plaintiff is
awarded the benefit of the bargain.
MONETARY DAMAGESNominal DamagesAmount awarded
when injured party has no actual loss but the nominal damages
indicate that there has been a breach of contract.
Punitive Damages (exemplary damages)Damages awarded to
punish the Defendant (damages in excess of actual loss)—Not
usually awarded in breach of contract cases.
Chapter 20
MEASURE OF DAMAGESCompensatory (money damages) that
may be recovered can be direct or consequential. Direct
damages are those caused by the breach. Ex. Failure to perform
contract to put a new roof on a home. Direct damages would be
the difference in cost of having another roofer put on the new
roof minus the cost of the original contract.Consequential
damages are extra expenditures made by the injured party to
rectify the breach.Ex. Roofing contract above. Consequential
damages would be damage to interior of home caused by rain
water that came into the house because of delay in getting new
roof caused by the original contractors failure to perform.

21. CONTRACT DAMAGESNot all damages will be awarded in a
contract action:Typically two types of damages will not be
awarded:Punitive damages (exemplary damages): Damages use
to punish the defendant.Normally, damages for mental or
emotional pain and suffering are not awarded in a contract
action.
MITIGATION OF DAMAGESDefinitionThe obligation in a
breach of contract case that the injured party take reasonable
steps to reduce their damages.The injured party must prevent
additional damages from occurring.Example: Roofing case
where roofer does not perform. Homeowner has duty to tarp the
roof to prevent rain from coming into the house.
EQUITABLE RELIEFA special category of damages This is
where fairness would require damages other than money to be
awarded. So, instead of awarding money damages, the court
awards equitable relief.Examples:RescissionSpecific
PerformanceInjunctionReformation
RESCISSIONRescissionWhen one party is guilty of a material
breach, the other party may set aside the contract.Damages with
a rescissionIf the injured party has performed, they can recover
the reasonable value of performance.
Chapter 20

22. SPECIFIC PERFORMANCEWhen an aggrieved party compels
the other party to perform the acts called for by the contract.
Specific performance is typically obtainable for a breach of a
contract to sell land or real estate on the theory that such
property has a unique value.
INJUNCTIVE RELIEFOrder of a Court that the Defendant
cannot do something.ExampleA vocalist has a contract that
gives a record label an exclusive record deal. The vocalist
breaches the contract. The court may order injunctive relief
which prevents the vocalist from entering into a contract with
another record label.
REFORMATIONWritten contract that does not clearly state the
agreement of the parties.Court will reform or correct the writing
to reflect the original intentions of the parties.Assumes parties
want to continue to do business.
CONTRACT TERMSLiquidated DamagesProvision in contract
which specifies how much will be paid if the contract is
breached.Court will enforce a liquidated damage clause
if:Contract situation makes it difficult or impossible to
determine actual damages andThe amount specified is not
excessive.Attorney feesAmerican rule-attorneys fees paid by
each party unless a contract provision or statutory provision to
the contrary.Limitation of Liability (Exculpatory)
clausesPrivate agreement to limit one party’s liability Invalid
when public interest is involved and there is gross negligence or
intentional acts.

23. ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS
With Doreen Smith, Esquire
Chapter 9
*
INTELLECTUAL PROPERTYIntellectual property
rightsTrademark, copyright and patents rights protected by law.
TRADEMARKS AND SERVICE MARKSTrademark A
trademark is a distinctive motto, name or symbol on a product
(Ex. Nike Swoosh). Service Mark A service mark identifies a
service (such as a drycleaner or airline).Lanham Act The
Lanham act is a federal law that grants the producer of a mark
the exclusive right to register and use the trademark or service
mark.
TRADEMARKS AND SERVICE MARKSRemedies for
Improper Use of Marks. Trademark holder has the right to an
injunction to prohibit unauthorized use of mark.The trademark
holder also can seek lost profits for unauthorized use of the

24. mark.With willful violations, courts may impose treble damages
(three times the damages actually sustained).
TRADEMARKS AND SERVICE MARKS
Trade Dress Protection.Trade dress involves product’s total
image, including packaging that is clearly recognizable by
consumers.Protected under the Lanham ActWhen competitor
adopts confusingly similar trade dress, it dilutes the mark and
deceives consumers.
TRADEMARKS AND SERVICE MARKS
Prevention of Dilution of Famous Marks.
Internet domain names belong to owners of businesses:
Amazon.com, Priceline.com, Cengage.com.
Cybersquatters: setup domain names that are identical or
confusingly similar.
Federal Anticybersquatting Consumer Protection Act provides
remedies: injunctive relief, forfeiture of domain name, attorneys
fees and costs, damages and lost profits.
COPYRIGHTS
A copyright is the exclusive right given by federal statute to the
creator of a literary or artistic work to use, reproduce, or
display the work in any medium, including the internet. Protects
expression of the idea.
Protects items like books, music, paintings, motion pictures and
computer programs.
Automatically protected under Berne Convention among all
signatory nations.

25. COPYRIGHTS
Duration of Copyright.Copyrights run for the life of the creator
plus 70 years after the creator’s death.If the copyrighted
material is a “work made for hire,” then business registers
work. Copyright extends for 120 years of creation (95 from
publication) then becomes public domain.
COPYRIGHTS
Copyright Notice.Although not legally necessary, it is
recommended that authors use the word “copyright” or “©” so
that infringers cannot claim innocent infringement.Copyright
infringement suit requires owner to have submitted a copy of
the work to the U.S. Copyright office.
COPYRIGHTS
Limitation on Copyrights“Fair Use” is an exception to the
exclusive rights of copyright holders, depending on four factors:
purpose and character; nature of the work; amount used; and the
effect on the use.Typically Fair Use is for teaching, news
reporting or research
PATENTS
Types, Duration, and Notice. A patent gives the inventor an
exclusive right from the date of application for a limited time to
make, use, and sell an invention that is new and useful and
unique (not obvious).

26. PATENTS
Patentability. Four categories: processes, machines,
manufactures, and compositions of matter.Owner of patent is
required to mark patented item by listing the word patent with
the patent number on the device.To receive a patent, the
invention must be new and not obvious. Once approved,
presumed valid.
PATENTS
Infringement. Patent owner has exclusive right to make or sell
the invention. Owner may bring an infringement suit for
unauthorized use of the patent.Patent owner can also receive
monetary damages.
SECRET BUSINESS INFORMATION
Trade Secrets. Any formula, device, or compilation of
information that is used in one’s business and is of such a
nature that it provides an advantage over competitors.
Loss of Protection.Trade secrets are protected under state law
for an unlimited period so long as they are not made public.
COMPUTER SOFTWAREComputer Software Copyright
ActProvides a written software program protection of other
copyrighted material.PatentsComputer programs have some
patent protection. However under patent law, the program must
be put in public records (which may then be copied).Trade
SecretsThere is some protection for software under trade secret
laws (such as when a trade secret is misappropriated by a

27. former employee)
SEMICONDUCTOR CHIP PROTECTIONSemiconductor Chip
Protection ActProtects mask works and the semiconductor chip
products in which they are embodied against chip piracy.Chips
operate microwave ovens, televisions, computers and other
devices.The act provides 10 years protection.
ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS
With Doreen Smith, Esquire
Chapter 10
*
INTERNATIONAL BUSINESS
Conducting business overseasDirect sale-export salesno
presence in foreign countryAgentUse an agent (person or firm)
to sell abroadForeign distributorship This entity takes title to
goods LicensingTransfer of technologyWholly Owned
SubsidiaryUS entity controls the business abroad.
FORMS OF BUSINESS ORGANIZATIONS

28. Export Sales
Domestic business works with foreign business to sell or
produce product.
Foreign Distributorship
Licensing and Franchising
Wholly Owned Subsidiary
Joint Venture
Agency
Direct sales from business to international customer – no
“middleman.”
Domestic business sets up a business in a foreign country &
maintains control.
*
4
Chapter 7
INTERNATIONAL LAWWhat Law Applies? Which country’s
laws will govern the transaction?Choice-of-law clause—a
contract clause designating what law will apply if there is a
dispute.Alternative Dispute Resolution (ADR)Parties designate
ADR to resolve disputes Financing International TradeThere is
no international currencyThe parties can also designate currency
in a contract.Letter of CreditCommercial devise used to
guarantee payment-bank makes payment to seller
*

29. 1
Chapter 7
SALE OF GOODS
In the United States when a good is sold between two parties in
different states, the Uniform Commercial Code (UCC) would
typically apply
Applies to both commercial and personal contracts (such as a
consumer contract)
Uniform laws apply in states that enact the law. Every state has
enacted the UCC with some minor exceptions.
The United Nations Conventions on Contracts for the
International Sales of Goods (CISG) applies to international
transactions.
Applies to two parties both of which live in countries that have
ratified the CISG
Applies to commercial contracts (not to personal, family or
household contracts).
GOVERNMENTAL REGULATIONBarriers to Trade. Tariff
BarriersA tariff is a tax on goods as they move in or out of a
country. Most common barrier to trade.NonTariff Barriers: e.g.,
import quotasExport Controls as Instruments of Foreign
PolicyThe Export Administration Act controls certain goods and
technical data from being exported by a US company when the
export can threaten the national security of the US

30. INTERNATIONAL TRADE ORGANIZATIONS,
CONFERENCES & TREATIES
GATT and WTO.
The General Agreement on Tariffs and Trade (GATT), is a
multilateral trade treaty, signed by 126 countries including U.S.
GATT created the World Trade Organization.
All member nations are treated equally.
WTO is a dispute resolution body to remedy GATT violations.
Avoids trade wars
WTO-INTELLECTUAL PROPERTYProtection of Intellectual
Property RightsIntellectual property includes trademarks,
copyrights and patents.Trade Related Aspects of Intellectual
Property (TRIPS)TRIPS provides a minimum level of protection
each government must provide to other members of WTO.Berne
Convention for the Protection of Literary and Artistic Works
This law is administered by the WTO and provides copyright
protection to WTO members.
REGIONAL AGREEMENTS
EU: European Council, European Commission, Parliament,
Court of Justice
Was initially established to remove trade barriers to member
countries and to unify their economic policiesThe North
American Free Trade Agreement (NAFTA): U.S., Canada, or
MexicoEliminates tariffs among the three countries.Opens
markets between Mexico, Canada and US
ANTIDUMPING, SUBSIDIES AND
SAFEGUARDSAntidumping ActionsWTO allows governments

31. to take actions against dumping (selling goods in another
country at less then fair value).SubsidiesThis is when a
government provides a subsidy for using domestic goods instead
of foreign goods. This is prohibited by the
WTO.SafeguardsThis allows a WTO member to temporarily
restrict an import that is causing serious injury to a domestic
industry.
GOVERNMENTAL REGULATIONForeign Corrupt Practices
Act (FCPA)Federal law that prohibits any payments or gifts to
high-ranking officials to influence a decision. Individuals may
be personally liable.
NOTE: the act does not apply to low-level officials to expedite
performance of routine government services.The FCPA can
result in criminal penalties and fines.